Rail fares set to fall in 2010

18 Aug 2009 by Mark Caswell

Fares for most commuter rail journeys in the UK will fall “for the first time in a generation” next year, due to caps set in place this month.

Yearly permitted increases for regulated fares are calculated in the previous July, with fare hikes capped at one per cent above the Retail Price Index. Last year this figure was five per cent, meaning rail operators were allowed to increase fares by six per cent in 2009, but the economic downturn means that this July’s RPI figure is -1.4 per cent, forcing operators to lower fares by 0.4 per cent next year.

The cap applies to all regulated rail fares in the UK, with the exception of the Southeastern and West Yorkshire PTE franchises, which have been given permission to raise prices by up to three per cent above RPI to fund recent and forthcoming investment in services.

Commenting on the news Transport Secretary Andrew Adonis said:

“This is good news. For the first time in a generation passengers across the country will see their fares fall. Drops in fares should encourage more people to travel by train, which is good for the economy and the environment.”

The government has also removed operators’ rights to raise individual fares by up to five per cent above the national fare change (providing the average increase across their services remained at no more than one per cent above RPI), which will ensure that most passengers do benefit from the cap.

Note that the cap does not apply to unregulated fares, such as cheap day returns and advance tickets.